Important Note
Tech Narratives was a subscription website, which offered expert commentary on the day's top tech news from Jan Dawson, along with various other features, for $10/month. As of Monday October 16, 2017, it will no longer be updated. An archive of past content will remain available for the time being. I've written more about this change in the post immediately below, and also here.
Yahoo reportedly under investigation by SEC over data breaches | VentureBeat (Jan 23, 2017)
The only Yahoo stories I’ve covered here on Tech Narratives so far are those concerning the breaches and subsequent fallout, which is a great indicator of Yahoo’s current state – the only news it’s capable of making is negative, with no meaningful new features or products produced in recent months, while the damage from the breaches continues to reverberate, with a formal SEC investigation just the latest step. Verizon seems to be leaning towards completing its acquisition despite all this, but at the very least should secure a significant discount in the price it will pay as a result of all this. Though the user fallout will be far less severe than the negative press coverage, Verizon will still have to deal with all the ongoing ripple effects of the breaches, and that’s worth a significant cut in the acquisition price.
via Yahoo reportedly under investigation by SEC over data breaches | VentureBeat (full coverage on Techmeme)
Hugo Barra is leaving his position as head of international at Xiaomi after 3.5 years – TechCrunch (Jan 23, 2017)
I attended Xiaomi’s press conference at CES earlier this month, and once again the company disappointed by not bringing more of its big products to the US. Although Hugo Barra has been in charge of Xiaomi’s international expansion for three and a half years, it has mostly expanded into other markets like India rather than major mature markets like the US or European countries. Ostensibly, Barra’s reasons for departing now are personal – he misses friends and family in the US, and wants to return there. But I wonder if he’s also been frustrated by Xiaomi’s lack of progress in pushing into some of those big markets. It’s impossible to know who’s been making the final decision on some of those moves – whether Barra or CEO Lei Jun – but not making it into the most high profile markets outside of China as head of international must feel like something of a failure. As with other recent high profile executive moves, it’s tempting to see this as a sign of broader troubles at Xiaomi, and things do seem to have been going poorly there recently, but this is so far something of an isolated case.
via Hugo Barra is leaving his position as head of international at Xiaomi after 3.5 years | TechCrunch (more coverage at Techmeme)
Samsung Electronics Announces Cause of Galaxy Note7 Incidents in Press Conference – Samsung (Jan 23, 2017)
See the Techmeme link below for full coverage of the press conference by reporters; the full press conference can be viewed here, with the conference starting around 29:30; and there’s some more detail on testing and other elements here. The related narrative has also been updated today to reflect the latest news.
My to-do list for Samsung at this press conference was as follows: demonstrate that the company really had found the root causes of both sets of battery fires, in a way that was credible; where possible have third parties involved; and talk through the changes to manufacturing processes to avoid these issues in future. It checked off each of these items at its press conference, so in that sense it did exactly what it needed to do: so far, so good. On the other hand, the results indicate that the manufacturing processes at Samsung’s battery partners were in some cases pretty shoddy, and that its own designs put pressure on batteries. So it’s not just the battery manufacturers at fault here, and a big part of the problem is lack of quality control –Samsung’s third party investigators were able to find faults in batteries that hadn’t caught fire, and replicate the conditions in which devices caught fire. The big question is therefore why Samsung wasn’t able to do so. All this suggests a lack of care around product testing and likely also a rush to market for competitive reasons which then shortchanged the manufacturing process. I have confidence that Samsung will make big process changes going forward, but less confidence that the culture that led to these problems will change in the same way.
via Samsung Electronics Announces Cause of Galaxy Note7 Incidents in Press Conference – Samsung Global Newsroom (full coverage on Techmeme here)
I was a VR skeptic (and then my 7-year-old son gave it a try) – GeekWire (Jan 21, 2017)
This is a fun little piece, and strongly mirrors my experiences with my own kids. To some extent, every new gadget or screen-based experience is appealing to them, but VR does have a certain extra something – I think the immersiveness is a big party of that. The reality is that VR is one of those things that’s really hard to take seriously until you try it, but once you do try it, you immediately see potential there. The problem right now is that lots of people are probably having these Day 1 / Day 2 experiences with VR, but there really isn’t enough content out there right now for Day 3 onwards – the novelty wears off fast. Hopefully, it’ll come in time, but a lot of the challenge for VR is that many people will never get the first experience with it this 7-year-old had, and even those that do will quickly run out of things to watch.
via I was a VR skeptic (and then my 7-year-old son gave it a try) – GeekWire
What happened to virtual reality? – Business Insider (Jan 21, 2017)
This piece argues that VR is currently underperforming expectations, and hasn’t panned out the way many of its proponents hoped. In reality (no pun intended), I think most of the companies have been pretty realistic about the prospects for the current generation of VR technology – Facebook in particular has said it doesn’t expect Oculus sales to be material to its overall financial picture, for example. So this is as much about inflated expectations around VR that came from others – observers, proponents, fans – than from the companies themselves. But in some ways that doesn’t matter – the narrative was that VR was finally here and going mainstream, and now it’s becoming that VR is falling short of expectations. The first was misguided, and now the second flows from those misguided expectations rather than from actual performance in the market. VR is still at a very early stage, and though Samsung has sold 5 million mobile VR headsets, it’s mostly still a niche proposition today, limited largely to the hardcore gaming market. It’ll take both technological advances and much more compelling content to appeal to non-gamers.
via What happened to virtual reality? – Business Insider
Qualcomm Comments on Apple Complaint – Qualcomm (Jan 21, 2017)
This is Qualcomm’s official statement on Apple’s lawsuit filed yesterday in San Diego, and it predictably pushes back on the key points in Apple’s filing. It argues that Apple has been the instigator of the various investigations of alleged anticompetitive behavior by Qualcomm in various jurisdictions, and that Apple has been misleading in its statements to the various authorities involved. Unlike some patent disputes, many of which are ultimately settled out of court, this one looks set to go the distance, given the sheer acrimony involved and the fact that this goes beyond a mere dispute over royalties. Combined with the FTC and Korean case, Qualcomm has plenty on its hands here.
via Qualcomm Comments on Apple Complaint | Qualcomm
Key Google executive heads to Uber – CNBC (Jan 20, 2017)
We’re not seeing anywhere near the same hysteria over this move from Google to Uber as we saw around Chris Lattner’s recent move from Apple to Tesla. In fairness, Singhal left Google a while back rather than making a direct switch, but the move is in some ways very similar – a senior engineer working on key products at a pure tech company is moving to a car-centric tech company. No-one seems to think Amit Singhal leaving Google is a sign that things are going wrong there, in contrast to the reaction to Lattner’s departure, which just highlights the power of narratives – Lattner’s departure from Apple taps into a powerful present narrative, while Singhal’s doesn’t. A few years back, when there was a cluster of departures from Google in quick succession, this was a story, but not today – that reflects both overall perceptions of these companies, but also the fact that people often do leave in clusters, often for similar reasons, but not always because they’re unhappy. Often, it’s just that they’ve been there for a long time and want a change of scenery or a new challenge. It’s nice to see this hire being seen in a more rational light. Update: as Recode points out, there are actually two hires here from Google, not just one, which just reinforces the point about narratives above.
via Key Google executive heads to Uber – CNBC
Two Sonos Updates – The Verge / Variety (Jan 20, 2017)
Sonos recently got a new CEO, and he’s been communicating with both staff and reporters. The Verge has a mostly intact copy of his internal email to staff, while Variety has an interview with the main himself. The letter to staff is less revealing, though it suggests some broad strokes of the company’s strategy, while the Variety interview adds more unique insight, such as Sonos’s plans to incorporate Amazon’s Alexa into its speakers, a possible IPO, and plans for more of a retail presence. Sonos is in a fascinating space – it was arguably the big standalone home speaker player before Amazon came along with the Echo, and still has the advantage when it comes to whole home audio. But Echo and Google Home offer a big feature Sonos doesn’t, and I think Spence is smart to plan to incorporate both Alexa and potentially other voice assistants. Sonos would still make a fascinating buy for Apple, which already has its products in most of its stores, but both the Echo/Home and Sonos markets could be threatened by an organic entry by Apple into this combined market too.
via The Verge (CEO letter) and Variety (CEO interview)
Jay Z Is Fraudulently Inflating Tidal Numbers, Report Says – Digital Music News (Jan 20, 2017)
Tidal has been one of the second tier music streaming services that often gets rolled up into the “Other” slice of streaming music subscriber number pie charts, but its reported numbers have been big enough in their own right to be broken out in some cases. There are only a handful or so of major music services around the world with more than a million paid subs, and Tidal is one of them, along with giants Spotify and Apple and fellow medium sized players Rhapsody/Napster and Deezer. But this report suggests Tidal has been exaggerating its actual subscriber numbers, which have always seemed surprisingly high, and that its real numbers are much closer to one million than the three million it has reported publicly. The reality is that Spotify and Apple between them dominate this market, with Spotify quite far ahead, and everyone else well behind Apple, which has also been growing rapidly. The other players have all struggled to find meaningful growth here, though the ad-supported streaming business is far more popular (though it also delivers far lower revenues to the industry). I wouldn’t be surprised if Tidal exits the market in the near future if this is the true state of its business.
via Jay Z Is Fraudulently Inflating Tidal Numbers, Report Says – Digital Music News
Apple Sues Qualcomm Over Patent Royalties in Antitrust Case – Bloomberg (Jan 20, 2017)
First we had the FTC taking action against Qualcomm, and now Apple is joining the fray, and I’d argue that’s not at all coincidental. Apple would obviously dearly love to pay Qualcomm less money for licensing and chips, and the FTC has given it the perfect ammunition by highlighting alleged wrongdoing on Qualcomm’s part. Intriguingly, it appears that Qualcomm has been withholding rebates due to Apple in retaliation for Apple assisting the South Korean authorities with their recent investigations into anticompetitive practices by Qualcomm. But Apple is also going a lot further, by making some of the same arguments put forth in the FTC case about overcharging for essential FRAND patents. This is going to get ugly. I’m seeing – both in this Bloomberg piece and elsewhere – suggestions that this lawsuit stems from high pressure Apple feels around iPhone growth and margins, but that’s nonsense – Apple will always try to get the best margins possible, and when it’s given a way to apply pressure to a supplier, it’ll do so. The FTC action provided just such a way, so that’s the proximate cause here, not any sort of crunch on the Apple side.
via Apple Sues Qualcomm Over Patent Royalties in Antitrust Case – Bloomberg
Snapchat Is Justifying Its $20 Billion Valuation by Emphasizing User Engagement – Bloomberg (Jan 20, 2017)
This is in some ways part of the same story we heard a while back about Snap positioning itself as another Facebook rather than another Twitter. Facebook is all about engagement, providing numbers on not just monthly but daily active users, and talking up time spent as well. Though Twitter briefly dabbled with metrics like timeline views as an indicator of engagement, it quickly abandoned that metric and has steadfastly refused to provide daily active user numbers, focusing instead on MAUs and directional rather than absolute measures of engagement. Snap clearly wants to avoid those associations with Twitter and so has provided to investors data on engagement across several dimensions, which will hopefully be made available in its S-1 filing when that’s made public too. A key part of the Snapchat value proposition is that its users spend a lot of time on the service, so proving that to investors will be critical.
via Snapchat Is Justifying Its $20 Billion Valuation by Emphasizing User Engagement – Bloomberg
Proposed state law would require emissions-free autonomous vehicles, and tax them by the mile – The Boston Globe (Jan 20, 2017)
As regulators and governments seek to provide a legal framework for autonomous driving, we’ll see something of a dichotomy between those who try to be as welcoming as possible to experiments and development of the technology, and those who see this as yet another opportunity to drive tax revenue or other separate goals. These lawmakers in Massachusetts seem to be taking the second approach, proposing that autonomous cars pay a per-mile road tax and produce zero emissions. Contrast this with Arizona’s governor, who has been very open to testing of autonomous vehicles and famously invited Uber’s self-driving cars to his state when they were banned from San Francisco. San Francisco, of course, is somewhere in the middle, largely open to testing of the technology, but with reasonable limits. Just as there will be fierce competition between tech companies around autonomous driving, there will be competition between states and cities around the technology too. Policies such as those being advocated in Massachusetts are likely to do little to endear the state to would-be autonomous driving companies.
AT&T’s Streaming Service DirecTV Now Peaking At 35,000 Simultaneous Users – StreamingMediaBlog.com (Jan 20, 2017)
Update: AT&T has now released official numbers, with over 200k paying users. So it appears Dan’s estimates were a little short. Though given that AT&T offered a free Apple TV for those who committed to three months of service, it’s possible some of those users aren’t active and will churn shortly.
Dan’s very good at what he does, so I have no reason to doubt that he’s in the right ballpark here, and these numbers are interesting in their own right. What’s even more interesting is how poorly this service has performed, and how unapologetic AT&T has been about it. I met with Enrique Rodriguez, the CTO for AT&T’s Entertainment Group, at CES, and although he acknowledged there were issues, he downplayed them. I have had better luck than some with the service once the first few days were over, but many people are still clearly having lots of issues, which is just baffling for something AT&T talked up so much ahead of time. Moreover, the platform AT&T is using for DirecTV Now is the same one it plans to use for Sunday Ticket online, its TV Everywhere services, and more going forward. I’d hope things start to change quickly here, because the way things are going right now this doesn’t look pretty.
via AT&T’s Streaming Service DirecTV Now Peaking At 35,000 Simultaneous Users – StreamingMediaBlog.com
NHTSA Finds No Fault in Tesla Autopilot With Regard to May 2016 Fatal Crash – NHTSA (Jan 19, 2017)
This is NHTSA’s report on the Tesla Autopilot crash in May 2016, which was investigating whether the Autopilot system was at fault. The headline from Tesla’s perspective is that the Autopilot system wasn’t at fault, because it (a) operated as expected, and (b) wasn’t intended to be able to avoid such cross-traffic collisions. That’s good for Tesla, because it exonerates its system, and also because NHTSA determined that its Autosteer system increases safety by 40%. Incidentally, the report also classifies Autopilot as a Level 2 system, whereas I’ve seen some people incorrectly refer to its as Level 3. The key here is that Level 3 systems allow the driver to stop paying attention, whereas Level 2 systems require full driver attention at all times. The problem in this crash was that the driver treated the system as a Level 3 system (which the term Autopilot somewhat implies), and paid insufficient attention to notice the truck crossing the car’s path. Tesla’s system may not have been at fault, but there’s a reasonable argument to be made that it’s not doing enough to train drivers not to treat its Level 2 system as something more – though NHTSA didn’t address that point in its report.
via NHTSA Finds No Fault in Tesla Autopilot With Regard to May 2016 Fatal Crash – NHTSA (PDF) – see also news coverage of the report on Techmeme
Twitter users are diverse but not its staff – USA Today (Jan 19, 2017)
Lots of the coverage of Twitter’s new diversity report (and accompanying blog post) today was positive – the company has made real progress over the past year in increasing its diversity and achieving its own goals, though it also fell short in some areas. However, Jessica Guynn at USA Today has been one of the most active reporters on the diversity beat and doesn’t think the gains are good enough – for one thing, Twitter didn’t share last year’s equivalent report, so it’s impossible to know exactly what gains have been made over the past year alone (the last report released publicly was the 2014 one). But the overall numbers for some minority groups are still very small relative to their share of the US population overall. Kudos to Twitter for increasing its diversity, but kudos to Guynn too, for holding not just Twitter’s but all tech companies’ feet to the fire on this issue.
via Twitter users are diverse but not its staff – USA Today
Errors in Facebook ad metrics could lead to more independent audits – Silicon Valley Business Journal (Jan 19, 2017)
This is the fallout from Facebook’s series of admissions towards the end of 2016 about its metrics relating to both content and ad performance: major advertisers are now going to be calling for more third party auditing of ad performance on Facebook. To the extent that Facebook is already said to be working with some outside groups on this, that effort needs to accelerate and come to a rapid conclusion to satisfy advertisers. On the other hand, it’s also clear from the same survey that Facebook is far from the only company whose ad metrics are mistrusted by advertisers – only Google has the confidence of over 50% of buyers, while AOL has the confidence of just 26%. But having said all that, advertisers don’t seem to feel they have alternatives to the big two, on which they plan to continue spending more money this year than last.
Your real-world purchases will soon determine what ads you see on Snapchat – Mashable (Jan 19, 2017)
Here’s further evidence that Snap is evolving Snapchat’s advertising targeting capabilities, something it badly needs to do to ramp up ad spending ahead of a potential IPO. But that also means going back on some of the commitments Evan Spiegel has made in the past to avoid “creepy” targeting. The reality is that Snapchat has captured a nice little share of ad spending purely on the basis of having a great target market for a certain generation at a general level, but if it wants to capture more targeted advertising, it needs to provide the tools that Facebook, Google, and others already provide. That means buying in data from Oracle (as in this deal, and further to a previous deal with Oracle for measuring ROI) or other data collection houses (as Facebook already does) in order both to target advertising and to capture information about subsequent purchases to prove an ROI. Though Snapchat’s target market is generally more open to ad-based business models and the attendant privacy implications, there’s a point at which even millennials will balk, and Snap has to be careful not to cross that line.
via Your real-world purchases will soon determine what ads you see on Snapchat – Mashable
Uber to Pay $20 Million to Settle FTC Charges on Earnings Claims for Drivers – WSJ (Jan 19, 2017)
Uber has often been willing to flout regulation in order to stake a foothold in a market, at which point it typically turns its customers into advocates and makes arguments about the contribution it’s making to the local economy in a bid to win formal approval from local authorities. This case brought by the FTC alleged that Uber had exaggerated those benefits significantly – it claimed NYC Uber drivers earned a median income of over $90,000, but the FTC found that under 10% of drivers earned that much, for example. Because Uber settled the case without admitting formal wrongdoing, there is no legal confirmation here that Uber lied, but that almost doesn’t matter. To the extent that Uber gets a reputation (accurate or otherwise) for lying about its economic benefits, its whole “better to ask for forgiveness than permission” strategy starts to break down.
via Uber to Pay $20 Million to Settle FTC Charges on Earnings Claims for Drivers – WSJ
Facebook temporarily blocked RT — and Moscow isn’t happy – The Washington Post (Jan 19, 2017)
This is the latest in a string of occasions when Facebook has blocked specific content or an entire account on the basis of a supposed violation of its terms, only to reverse itself. But in this case, it’s a bit different – RT is a highly controversial Russian state-funded news outlet at a time when Russian interference in the US electoral process is a hot topic. The account’s privileges were quickly reinstated in this case, but there now appears to have been no legitimate reason to withdraw them in the first place, raising questions about who at Facebook made the decision to suspend the account and why. At a time when Facebook is trying to be more responsible about policing fake news and also working more closely with news organizations, this kind of thing won’t inspire a lot of confidence either among news organizations or among those inclined to belief Facebook’s fake news clampdown has a partisan bent.
via Facebook temporarily blocked RT — and Moscow isn’t happy – The Washington Post
Google’s Big Marketing Push Pays Off for its Pixel Phone Over Holiday – Bloomberg (Jan 19, 2017)
This piece is an interesting counterpart to a couple of others I’ve recently linked to – another quoting Wave7 estimates for Pixel sales, and this WSJ analysis from earlier today on how hard Alphabet has been pushing sales of its hardware on Google search, given what this piece says about heavy TV advertising by both Google and Verizon around the Pixel. It’s also worth reading this Verge piece, which takes a much harsher stance on what these sales numbers and the supply shortages mean, though it focuses almost exclusively on the 128GB model. The point is, Pixels are in short supply, and there’s an estimate in this Bloomberg piece of around half a million sales, so this is a very different supply shortage from Apple struggling to meet demand for over 70 million phones per quarter – in other words, this isn’t about hitting up against theoretical maximum capacity for building phones, but about very conservative planning on Google’s part. Half a million isn’t bad, but it’s fairly clear sales could have been a lot higher with better supply. Presumably Google will learn from this experience as it looks to update the Pixel, possibly later this year.
via Google’s Big Marketing Push Pays Off for its Pixel Phone Over Holiday – Bloomberg